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Chancellor warns of Greece 'risk' to global economy

Greek Finance Minister Yanis Varoufakis meets with Britain's finance Minister George Osborne Image copyright AFP
Image caption Chancellor George Osborne urged his counterpart Yanis Varoufakis to "act responsibly"

George Osborne has warned the standoff between Greece and the eurozone "is fast becoming the biggest risk to the global economy".

The chancellor was speaking after his meeting with Greek Finance Minister Yanis Varoufakis on Monday.

He urged Mr Varoufakis "to act responsibly" in any bailout negotiations with Europe.

Mr Osborne added the standoff presented "a rising threat to our economy at home".

But the chancellor said the the eurozone must also come up with "a better plan for jobs and growth".

Ahead of the meeting, Mr Osborne said he welcomed the opportunity to "discuss face-to-face with Yanis Varoufakis the stability of the European economy and how to boost its growth".

Greece's finance minister is seeking to renegotiate Greece's huge debt obligation in the face of opposition from Germany, Europe's largest economy and Greece's biggest creditor.

The economist-turned-finance minister, who is on a tour of European capitals, says his priority is the well-being of all Europeans and has ruled out accepting more bailout cash.

European tour

After talks with his French counterpart over the weekend, Mr Varoufakis said a new debt deal was needed within months.

French Finance Minister Michel Sapin said his country was ready to help Greece settle with its creditors.

Mr Varoufakis is to travel to Rome next on his trip around Europe's capitals and financial hubs.

His comments follow remarks on Saturday by new Greek Prime Minister Alexis Tsipras, who said he was confident Greece could reach a deal with creditors.

Greece's anti-austerity Syriza party won last month's general election with a pledge to write off half the country's debt.

Greece still has a debt of €323bn - about 175% of gross domestic product - despite some creditors writing down debts in a renegotiation in 2012.

German Chancellor Angela Merkel has ruled out debt cancellation, saying creditors had already made concessions.

Austerity measures imposed in an effort to manage the debt have prompted outrage in Greece and led voters to reject the previous government.

The European Commission, the IMF and the European Central Bank - the so-called "troika" - agreed a €240bn (£179bn) bailout with the previous Greek government.

Greece's current programme of loans ends on 28 February. A final bailout tranche of €7.2bn was still to be negotiated but the new government has already begun to roll back austerity measures, including the cancellation of the previous government's programme of privatisations.

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